Special Focus on the Legal Environment of HR. The Environmental Context of Human Resource Management...

Special Focus on the Legal Environment of

HR

The Environmental Context ofHuman Resource Management

• Human Resource Management (HRM)–The set of organizational activities directed at

attracting, developing, and maintaining an effective work force.

• The Strategic Importance of HRM–Human capital reflects the organization’s investment in

attracting, retaining, and motivating an effective workforce critical for effective organizational functioning.

8–2

The Legal Environment of HRM

Equal Employment Opportunity

Compensationand Benefits

Labor Relations

Health and Safety

Title VII of Civil Rights Act of 1964

Fair Labor Standards Act of

1938 (FLSA)

National Labor Relations Act of

1935 (Wagner Act)

Occupational Safety and Health

Act of 1970 (OSHA)

Pregnancy Discrimination Act Equal Pay Act

of 1963Labor Management

Relations Act of 1947

(Taft-Hartley Act)Age Discrimination in Employment Act Employee

Retirement Income Security Act of 1974 (ERISA)Americans with

Disabilities Act

Family and Medical Leave Act of 1993

(FMLA)Civil Rights Act

of 1991

8–3

Executive Order11246 – Affirmative

Action

Affordable Care Act (ACA)


• Title VII of the Civil Rights Act of 1964–Forbids discrimination in the employment relationship.

“It shall be an unlawful employment practice for an employer to fail or refuse to hire, or to discharge an individual or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such an individual’s race, color, religion, sex, or national origin.”

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Civil Rights Act of 1964

• Define “discriminate”.• Is all discrimination illegal?• What are the five protected class of Title VII?• What is “disparate treatment”?• What is “disparate impact”?

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Civil Rights Act of 1964 – example landmark decisions (case law)

Race Discrimination–Griggs v. Duke Power–Spurlock v. United Airlines

Sex Discrimination–Diaz v. Pan Am–Phillips v. Martin Marietta

National Origin, Religion, Color Discrimination

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Civil Rights Act of 1964

• BFOQ – Bona Fide Occupational Qualification–What is it? Where is it allowed?–The Hooters case–http://

blogs.findlaw.com/free_enterprise/2009/04/can-men-be-hooters-girls-when-can-businesses-hire-only-women.html

• EEOC – Equal Employment Opportunity Commission–Federal agency charged with enforcing Title VII as well

as several other employment-related laws.–Process Complaints–Issue Guidelines

http://blogs.findlaw.com/free_enterprise/2009/04/can-men-be-hooters-girls-when-can-businesses-hire-only-women.html




Age Discrimination in Employment Act of 1967

• Age Discrimination in Employment Act of 1967–Outlaws discrimination against people older than

40 years of age.–Management Challenge: Can an employer at the

Career Fair tell you “well, we like your resume, but we are looking for someone a little older”?

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Executive Order 11246

• Affirmative Action–The commitment of employers to proactively seek out,

assist in developing, and hire employees from groups that are underrepresented in the organization.

–Various executive orders, especially Executive Order 11246, require federal contractors to develop affirmative action plans and engage in affirmative action in hiring veterans and the disabled.

–What is an underrepresented group?–How does the employer document they are proactively

seeking and hiring underrepresented individuals?

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Equal Employment Opportunity (cont’d)

• Americans with Disabilities Act of 1990 (ADA)–Forbids discrimination on the basis of disabilities and

requires employers to provide reasonable accommodations for disabled employees.

• What constitutes a disability?• What constitutes reasonable accommodation?

• Civil Rights Act of 1991–Amended the original Civil Rights Act, making it easier

to bring discrimination lawsuits while also limiting punitive damages ( in addition to compensatory damages) that can be awarded in those lawsuits.

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Compensation

• Fair Labor Standards Act of 1938 (FLSA) –Sets a minimum wage and requires overtime pay for work

in excess of 40 hours per week.– What is the minimum wage? Do all states comply?

– Are there any jobs with minimum wage exceptions?

– Salaried professional, executive, and administrative employees are exempt from the Act’s minimum wage and overtime provisions. Who is considered non-exempt? What does it mean to be non-exempt?

• Equal Pay Act of 1963–Requires men and women to be paid the same amount

for doing the same jobs; exceptions are permitted for seniority and performance pay.

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Benefits

• Employee Retirement Income Security Act of 1974 (ERISA) –Sets standards for pension plan management

and provides federal insurance if pension plans go bankrupt.

• Family and Medical Leave Act of 1993(FMLA)–Requires employers to provide up to 12 weeks of

unpaid leave for family and medical emergencies.• What constitutes “family”?• What constitutes “medical emergencies”?

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Labor Relations

• National Labor Relations Act of 1935 (Wagner Act)–Set up procedures for establishing unions and

requires employers to bargain collectively with unions.

• National Labor Relations Board (NLRB)–Is the federal agency that enforces the NLRA.

• Labor Management Relations Act of 1947 (Taft-Hartley Act)–Limited power of unions and increased management’s

rights during organizing campaigns.

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Health and Safety

• Occupational Safety and Health Act of 1970 (OSHA) requires that employers:–Provide a place of employment that is free from

hazards that cause death or serious physical harm.–Obey safety and health standards set by the

Occupational Safety and Health Administration (OSHA).

• How does OSHA enforce safety standards?• And if you don’t follow safety standards…

– Consequences?

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Sexual Harassment – Guideline provided by the EEOC

• Quid Pro Quo & Hostile Environment“Unwelcome sexual advances, requests for

sexual favors, and other verbal or physical conduct of a sexual nature constitutes sexual harassment when; (1) submission to such conduct is made either explicitly or implicitly a term or condition of employment, (2) submission to or rejection of such conduct by an individual is used as the basis for employment decisions, or (3) such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance, or creating an intimidating, hostile, or offensive environment.”

Landmark case: Meritor v. Vinson

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HR & The Legal Environment

• Will you likely practice HR functions in your career, even if you are not in the HR department?

• Why do you need to be aware of legal issues involving HR?

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The Environmental Context ofHuman Resource Management

• Human Resource Management (HRM)–The set of organizational activities directed at

attracting, developing, and maintaining an effective work force.

• The Strategic Importance of HRM–Human capital reflects the organization’s investment in

attracting, retaining, and motivating an effective workforce critical for effective organizational functioning.

–HR decisions should be linked to strategy• Walmart ( cost leadership): higher than average wages?

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8-19

Strategic Human Resource Management

Develop an Effective Workforce

TrainingDevelopmentAppraisal

Maintain an Effective Workforce

Wage and salaryBenefitsLabor relationsTerminations

HRM planningJob analysisForecastingRecruitingSelecting

Attract an Effective Workforce

Company StrategyCompany Strategy


The Legal Environment of HRM


Compensationand Benefits

Labor Relations

Health and Safety

Title VII of Civil Rights Act of 1964

Fair Labor Standards Act of

1938 (FLSA)

National Labor Relations Act of

1935 (Wagner Act)

Occupational Safety and Health

Act of 1970 (OSHA)

Pregnancy Discrimination Act Equal Pay Act

of 1963Labor Management

Relations Act of 1947

(Taft-Hartley Act)Age Discrimination in Employment Act Employee

Retirement Income Security Act of 1974 (ERISA)Americans with

Disabilities Act

Family and Medical Leave Act of 1993

(FMLA)Civil Rights Act

of 1991

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We will cover EEO law in next class.

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What is HRM? A Case Study

• Example: College Hunks Hauling Junk• http://www.youtube.com/watch?v=sRwfctYPnY8What HUMAN RESOURCE issues do owners Omar and

Nick have to be concerned with?

What happens to the company if they consistently fail to hire the right people?

• http://www.youtube.com/watch?v=3_HpuUCFj-g&feature=relmfu

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http://www.youtube.com/watch?v=sRwfctYPnY8

http://www.youtube.com/watch?v=3_HpuUCFj-g&feature=relmfu

http://www.youtube.com/watch?v=3_HpuUCFj-g&feature=relmfu


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FIGURE 8.1 Human Resource Planning – the first step of Attracting a Workforce


Attracting Human Resources

Job Analysis

A systematic analysis of jobs within an organization.

Job Description

A listing of the job’s duties; its working conditions; and the tools, materials, and equipment use to perform the job.

Job Specification

A listing of the knowledge, skills, abilities, and other credentials the incumbent jobholder will need to do a job.

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Managers Challenge: What are the responsibilities of Truck Captains and Wingmen? What are the job specification requirements?


Recruiting Human Resources

• Recruiting–The process of attracting qualified persons to apply

for jobs that are open.

• Internal Recruiting (Promotion from Within) –Involves considering present employees as

candidates for openings.–Can help build morale and reduce turnover of high-

quality employees.–Can create a “ripple effect”—the disadvantage of

having to successively fill vacated positions.

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Recruiting Human Resources (cont’d)

• Realistic Job Preview (RJP)–Is a successful method to ensure person-job fit.

Executive search firms

Union halls

Employee referrals

Sources ofExternal Recruits

Advertising

Campus interviews

Employment agencies

Walk-ins

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The Selection Process

Pool of candidates complete application blanks

Remaining candidates complete test battery

Remaining candidates are interviewed by managers

Final candidates receive job offers

Physical exams may be required for employment

Initial screening

Test scoring

References checked, final decisions made

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Selecting Human Resources

• Validation –The process of determining the predictive value of

information gained from a selection device.

• Application Blanks–Gather information about work history, educational

background, and other job-related demographic data.–Must not ask for information unrelated to the job.–Are used to decide if a candidate merits further

evaluation.–Provide interviewers with candidate information.

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Selecting Human Resources (cont’d)

• Tests–Ability, skill, aptitude, or knowledge tests are

usually the best predictors of job success.–Must be validated, administered, and scored

consistently.–The testing process must be the same

for all candidates.

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Selecting Human Resources (cont’d)

• Interviews–Interviewer biases can be overcome and interview

consistency and validity can be improved by training interviewers and using structured interviews.

• Assessment Centers–Are used to select managers from current employees

for promotion.

• Other Techniques–Polygraph testing, physical exams, drug tests, and

credit checks to screen prospective employees.

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College Hunks Hauling Junk Interviews

Interview Questions

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http://www.job-applications.com/interview-questions/

http://www.job-applications.com/interview-questions/


Developing Human Resources

• Training–Teaching operational or technical employees

how to do the job for which they were hired.

• Development–Teaching managers and

professionals the skills needed for both present and future jobs.

• Assessing Training Needs–Determining training needs is

the first step in developing a training plan.

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Developing Human Resources (cont’d)

LecturesRole play and case studies

On-the-job and vestibule

training

Common Training Methods

Web-based and electronic

training

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Training and Development Evaluation

• Training and development programs should always be evaluated.–Approaches include measuring relevant job

performance criteria before and after the training to determine the effect of training.

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Performance Appraisal

• Performance Appraisal–A formal assessment of how well employees

do their jobs.

• Reasons for Performance Appraisal–Appraisal validates the selection process and

the effects of training.–Appraisal aids in making decisions about pay raises,

promotions, and training. And terminations.–Appraisal provides feedback to employees to improve

their performance and plan future careers.

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Judgmental Appraisal Methods

• Ranking Method–Compares employees directly with each other.–Difficult to do with large numbers of employees.–Difficult to make comparisons across work groups.–Employees are ranked only on overall performance.–Do not provide useful information for employee

feedback.

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Judgmental Appraisal Methods (cont’d)

• Rating Method–Compares each employee with a fixed standard.–Uses graphic rating scales of job performance

dimensions to be rated on a standard scale.

• Behaviorally-Anchored Rating Scale (BARS)–Is a rating scale where each point on the scale is

associated with behavioral anchors.

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FIGURE 8.2 Graphic Rating Scales for a Bank Teller


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FIGURE 8.3 Behaviorally Anchored Rating Scale


Errors in Performance Appraisal

• Recency Error–The tendency of the evaluator to base judgments on

the subordinate’s most recent performance because it is the most easily recalled.

• Errors of Leniency and Strictness–Being too lenient, too strict, or tending to rate all

employees as “average.”

• Halo Error–Allowing the assessment of the employee on one

dimension to spread to that employee’s ratings on other dimensions.

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“360 degree” Performance Appraisal

• “360 degree” Feedback–A process in which employees and managers are

evaluated by everyone around them.–Provides a richer array of performance information on

which to base an appraisal.

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How could College Hunk’s use 360 degree Feedback?


Performance Appraisal Feedback

• Performance Feedback–Is best given in a private meeting between

the employee and immediate supervisor.–Is more effective if managers are properly

trained to conduct feedback interviews.

• Focus of Appraisal Discussion:–Assessed level of performance–How and why the assessment was made–How the employee’s performance can be

improved in the future.

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College Hunks Feedback

Employee ……• Tracks mud in customer

residence;• Lets customer’s dog out;• Sits in truck in front of

customer’s house and talks on phone for 45 minutes;

Manager says……• ____________________

• ____________________• ____________________

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What happens when an employee exhibits poor performance and the manager provides NO FEEDBACK? Does timing matter?


Keeping Employees: Direct Compensation

• Forms of Compensation–Wages are hourly compensation paid to operating

employees.–Salary is paid for the total contribution of an employee

and is not based on total hours worked.–Incentives are special compensation opportunities that

are usually tied to performance.

• Purposes of compensation–Provide a reasonable standard of living.–Provide a tangible measure of an individual’s value to

the organization.

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Steps in Determining Compensation

Wage-level decisions:• Organization strategy• Availability of resources• Wage survey data• Unemployment rates

Wage-structure decisions:• Internal equity• Job rankings• Job evaluations

Individual wage decisions:• Experience• Performance• Seniority

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Indirect Compensation:Determining Benefits

Pay for time not worked

Life, health, and other insurance

Service benefits

Cafeteria benefit plans

Types of Employee Benefits

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Managing Labor Relations

• Labor Relations–The process of dealing with employees when they are

represented by a union.–Organizations prefer that employees remain nonunion

because unions limit management’s freedom.–The best way to avoid unionization is to practice good

employee relations by:

• Providing fair treatment with clear standards in pay, promotions, layoffs, and discipline.

• Providing a complaint and appeal system and avoiding favoritism.

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FIGURE 8.9 The Union-Organizing Process


New Challenges in the Changing Workplace

• Managing Knowledge Workers–Knowledge workers’ contributions to an organization

are based on what they know (as experts).• Computer scientists, engineers, and physical scientists

–Knowledge Worker Management and Labor Markets• Offering competitive starting salaries and sign-on bonuses.

• Regular upward compensation adjustments to stay competitive with external labor market rates.

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Managing the Changing Workplace

• Contingent and Temporary Workers–Are not permanent or full-time employees

• Independent contractors, on-call workers, temporary employees, contract and leased employees, and part-time workers.

• Represent about 10 percent of the U.S. workforce.

–The increasing use of this type of workers is driven by the strategic need for organizations to maintain flexibility in staffing levels and to control labor costs.

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So why does HR matter?

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1.What is strategic HR?2.Why do companies need strategic HR?3.What is HR planning?4.What is the general purpose of Recruitment

and Selection practices?5.What is the general goal of Performance

Appraisal and Feedback?6.What is the general goal of Compensation?7.Everything about HR is in a heavily

_________________ environment. Why?

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